The Federal Reserve committee responsible for making interest rate decisions met for its July confab on Wednesday and subsequently announced that it would again raise interest rates by 0.25 percent to 5.50 percent.
BREAKING: The Federal Reserve has hiked rates by 25 BPS.
— unusual_whales (@unusual_whales) July 26, 2023
Wednesday's decision comes after the Fed hit a "pause" on interest rate hikes at its last meeting, giving false hope to some that the worst of inflation had finally hit and the aggressive consecutive rate hikes announced for more than one year straight had finally wrangled the inflationary costs hitting Americans' wallets.
Like many other claims that inflation had "peaked" in months gone by, it turned out that inflation was not done wreaking havoc on the U.S. economy. As the most recent interest rate decision showed and the Federal Open Market Committee (FOMC) stated on Wednesday, "[i]nflation remains elevated."
Federal Open Market Committee statement: https://t.co/AtyYGAmTFY
— Federal Reserve (@federalreserve) July 26, 2023
With this latest hike, Fed interest rates are now the highest in 22 years. As the FOMC release on Wednesday's decision suggested, rate increases could continue by leaving the door to further increases open:
The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
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With inflation remaining above the Fed's target rate of just two percent — remaining double that on an annual basis and up more than 16 percent since President Biden took office — Americans are still facing and struggling to cope with rising prices that drove their real incomes negative for 27 out of the past 30 months. That means more debt, more pain, and more financial worries. All thanks to what the White House brags is "Bidenomics."
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